In March of 2010, I was sitting in a bankruptcy attorney’s office. After 6 years of pursuing my life-long dream of being a professional marital arts instructor and gym owner, I was over extended. And it wasn’t just that I was several tens-of-thousands of dollars in debt and had negative cash flow…
16-hour work days had me over extended on my energy levels. With all of my attention focused on trying to save my business, I was over extended in my relationships. And constantly trying to act like everything was fine in front of my clients and employees when things were really in the toilet had me over extended with my integrity. I was bankrupt in ways far beyond my finances.
But just over a year later, things seem to be leveling out. I now work from home as a professional blogger, largely in support of the 31 Day Fat Loss Cure. The past year was tough – probably the toughest I’ve experienced to date – but as I look back, I can’t help but appreciate the lessons learned. Below are 7 things that I learned from going bankrupt:
1. Follow your dreams and the money will follow is bullshit. There is so much more to it than that. You can have the biggest dream, but you damned sure better have rock-solid business procedures in place to back it up. I flew by the seat of my pants for the first three years I was in business… and then it was too late to play catch up. Have your procedures in place for sales, marketing, and customer service before you ever open the doors to your “dream” business.
2. Closing the dream doesn’t mean closing the message. The internet is an amazing thing. Seriously, I marvel at it’s infinite scalability. I had an 8,000 square foot storefront facility. In all of it’s monstrosity, at maximum capacity I could maybe serve 600 people. By comparison, the 31 Day Fat Loss Cure has sold over 15,000 copies in less than a year. The Rebel Strength Guide sold over 250 copies in the first week. I can help more people with the same or similar messages that I conveyed in my storefront business with far less overhead and time on the clock via the internet.
3. Lack of money is lack of power. Over the past year, I stacked envelopes in a processing plant for barely above minimum wage to make ends meet. I sold my old books and DVD’s for grocery money. I watched my dog claw at his swollen infected ears because I could not afford to take him to the vet. These humbling experiences were the result of not having the cash on hand to meet even my basic needs. Lack of money is lack of power – don’t doubt it.
4. Credit cards are a high-risk game. I financed the start up costs of my business with credit card debt. My thought process was that I didn’t want to wait – with the salary I was making as a government lawyer at the time it would have taken me forever to save up enough money to open the doors. But as business expanded, so did my overhead, and I started using credit to cover monthly expenses. The plan was that business would eventually pick up to the point where I could repay the debt, but that was a sucker’s bet. If you use credit cards, I suggest checking out my buddy Steve Kamb for tips on turning them into frequent flyer miles machines. Personally, I never want to have another credit card.
5. Once you go Biz you can never go back. My first line of thought after going bankrupt was, “well, time to get a job.” And try to get a job I did. Literally hundreds of applications and resumes distributed… and almost no interviews. The only interviews I had were for police officer jobs where receiving an interview is mandatory if you pass the initial entrance exam requirements. But the whole time I was looking for a “job”, the entrepreneurial bug kept scratching at the back of my brain. I accepted two independent contractor positions (one as a private investigator and one as an office manager), neither of which lasted very long. It wasn’t until I pursued online business full-time that my financial footing was regained.
6. They can’t eat me. “They can’t eat me”, was a phrase an old Army buddy of mine used to say. This guy was always in trouble – drunk and disorderly, late for formation, losing his equipment – and so he was always being punished. The Army docked his pay, busted him down in rank, had him dig useless fox holes in the blazing sun, and eventually threw him out. And with each punishment administered, he just grinned and said, “they can’t eat me.” So it became my mantra. . . when creditors called or the bankruptcy hearing officer sent me home because I didn’t have my social security card, I just thought “they can’t eat me”. It was my reminder that things could always be worse. . .
7. Things can always be worse. Less than two weeks after I closed the doors to my business, my home was burglarized. They stole my big screen television (might have been a blessing in disguise), various other electronics, and $1,100.00 cash that my mother had given me to live on while I looked for a job. But the only thing I cared about was my dog.
When I saw my kitchen window had obviously been a point of entry for someone, I cracked open my door and yelled for Coda. There was no response – no scurry of his nails across my wood floors, no bark of relief, nothing. I thought either he ran off during the crime or the burglars killed him. Thankfully, the burglars had just locked him in a bedroom and Coda was unharmed. But that moment of fear that my dog was gone let me know what really mattered to me. Bankruptcy was nothing – I still had a roof over my head, my health was good, and my dog was fine. All was well in my world.
Bankruptcy was definitely a low point in my life, but it is far from a unique experience. Henry Ford, Mark Twain, and Abraham Lincoln all filed bankruptcy. And I’d say that’s not bad company to keep, but Benedict Arnold and John Wayne Bobbitt also went bankrupt. Oh well, at least I still have Coda.
Have you endured financial setbacks that helped you learn life lessons? What other trials of life have been great teachers? Share your thoughts in the comments below.
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